Cement production at the Penden Cement Authority Limited (PCAL) in Gomtu, Samtse was hit bad last month after a gearbox in one of the two coal mills that serve in clinker production broke down. Clinker is used to produce cement.
Kuensel found that the gearbox of one of the coal mills still remained broken yesterday. This comes after a series of breakdowns the cement manufacturing company has experienced from April this year.
The problem started in April 21 this year. With in-house repairs, the plant resumed after four days. However, after May 16, the gearbox broke down and PCAL was unable to fix it permanently.
Later in June, the main drive gear in the other coal mill also had similar problems.
Although cement production was managed using imported clinker, officials said that the plant had suffered complete shutdown from June 26 to June 30. There was no production.
PCAL can produce about 1,600MT of cement a day depending on the demand.
In June this year, PCAL was able to dispatch 12,135 metric tonnes (MT) of cement. For the same month in 2016, Penden had dispatched 30,243MT of cement.
A metric tonne of cement costs Nu 5,617.5. This means, PCAL saw a negative difference of 18,108MT of cement worth Nu 101.72 millions.
From January to June last year, PCAL dispatched about 205,826MT of cement. This year for the same period, the company dispatched about 179,524MT. PCAL saw a negative difference of 26,302MT of cement worth Nu 147.75M.
As of yesterday, PCAL was not able to procure or replace the gearbox. Officials said that today is the last day for interested suppliers to propose for the second-hand gearbox, PCAL has advertised. This procurement tender is floated for the second time.
PCAL chief executive officer (CEO) Kaylzang Tshering said that coal mill 2 for clinker production is still out of operation with the gearbox broken.
“But it doesn’t mean everything stops,” the CEO said. “But production quantity will drop since we are unable to operate in full capacity.”
When both coal mills functioning, the plant produces about 900MT to 1,000MT of clinker a day. With just k-line coal mill functional, CEO Kaylzang Tshering said the plant produced 250MT of clinker a day, which is about one fourth of the total usual clinker production a day.
“But due to other factors, it is not advisable to run just this line,” he said, adding that it was economically not viable.
In such conditions, PCAL imports clinker from India. A metric tonne of clinker is bought at Nu 4,400 today, an increase from last year’s Nu 3,400.
Towards the end of June, PCAL, however, was unable to purchase clinker as the Indian suppliers were unsure of GST impact and were waiting to see its implications.
Recently about 5,000MT of cement was procured. At the moment, PCAL is still manufacturing cement using the purchased clinker. Sources said that the imported clinker has already exhausted.
Meanwhile, cement production and clinker production are two separate and independent systems.
Even when there were no issues in clinker production plant, PCAL had been importing quality clinker to mix with Penden generated clinker to meet required standards. The clinker that is produced using limestone of PCAL mines is slightly inferior in quality, officials from the plant shared with Kuensel.
Several Penden employees are concerned about the company’s current situation. They said that the complete shutdown from June 26 to June 30 was not good.
Considering the current rate of Nu 5,617.5 per MT and the daily minimal production of 1,200MT of cement a day, the employees said PCAL had lost more than Nu 33M in just five days.
They also shared that Penden would have to invest millions in purchasing clinker from Meghalaya, India.
However, the CEO’s decision to cancel the purchase of a second-hand gearbox, which senior officials had agreed to do so in a meeting that the CEO hadn’t attended, was the main worry to the employees.
“We are losing millions each day; what is the problem in getting a gearbox that costs just Nu 1.5M,” an employee said. “Whose responsibility is it to decide this?”
Anonymous accounts had also were posted against the PCAL management in the social media complaining that the CEO had cancelled a deal to get second-hand gearbox at Nu 1.5M.
Regarding the social media complaints, PCAL CEO said that he has not seen it. “My friends told me about it,” he said. “It is their choice.”
It is also upto the readers whether to determine if what is posted is a true story or somebody’s imagination, Kaylzang Tshering said.
PCAL is looking for a used gearbox because it takes a minimum of six months to procure a new gearbox.
“We have to have a customised gearbox that fits in the plant,” Kaylzang Tshering said adding that it was difficult to get a second-hand gearbox. The gearbox, meanwhile, is more than 20 years old.
On the employees’ concern about the current situation, the CEO said that it is for people to decide if his decision was right or wrong. “I am not insinuating anything but there are people who make quick deals.”
The CEO also said that proper channel and documentations are important to get a used gearbox. Such requirement was not there in place, he added.
Employees Kuensel met, however, said that getting a used one at Nu 1.5M was a better option than doing nothing and running at loss in millions each day. These employees also said that the supplier had agreed to offer the used gearbox at Nu 1.5M, which according to them was rejected by the CEO.
Later, when the management wanted to procure that same gearbox, that same supplier had inflated the price to Nu 2.1M.
Until the gearbox problem is settled, PCAL will continue producing cement using imported clinker. He said they have been buying clinker of higher quality prior to such issues.
On the concern employees shared about not getting their salary on time if the gearbox problem persists, the CEO assured that there is no need to worry. “PCAL has money in reserves,” he said.
As of yesterday, PCAL had 2,215MT of cement. About 800MT was dispatched in the domestic market. Export to India has stopped since June 18.
Rajesh Rai | Gomtu